Massachusetts Secretary of State William F. Galvin said Wednesday he had fined Deutsche Bank Securities Inc. $17.5 million for allegedly failing to disclose conflicts of interest related to collateralized debt obligations, or CDOs, before the financial crisis.

CDOs were widely created and structured by Wall Street firms in the run-up to the crash in 2008; these investments are sliced up pieces of debt, many of them mortgage-related, that are repackaged and sold as securities. Many of these investments plummeted in value as the housing market slumped and a global credit crunch ensued.

The Massachusetts Securities Division, which Galvin oversees, investigated Deutsche Bank Securities for its alleged failure to disclose its roles in proposing, structuring, and co-investing in a $1.56 billion CDO named Carina.

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Galvin’s office last year fined Boston’s State Street Corp. $5 million for its alleged role in the same CDO. Goldman Sachs & Co. and other firms also have paid fines in regulatory actions brought related to CDOs.

The state’s investigation into Deutsche Bank Securities focused on a proprietary trading desk of the bank’s Special Situations Group. That group worked with a hedge fund, Magnetar Capital, on the CDO proposal, and the two co-invested in six of the investments, the state said. When Carina was being marketed to investors, one investor backed out upon learning that

Magnetar was shorting (or betting against) the BBB-rated assets in the CDO, according to the state. A Deutsche Bank employee’s e-mail asked, “Why does (prospective investor) know Magnetar is shorting BBBs?” Galvin’s office said.

Galvin said the product marketing materials did not disclose the alleged conflicts of interest Deutsche Bank and Magnetar had in underwriting and selling Carina, as well as investing in it.

Within a year, rating agencies downgraded Carina’s notes to junk status, resulting in “catastrophic losses to investors,” Galvin said.

Deutsche Bank neither admitted nor denied that it violated the law, although it admitted to the facts laid out in the state’s case. A spokesman for the firm, Duncan King, said, “We are pleased to have reached this settlement and put this matter behind us.”

Magnetar was not a named defendant in the case.

The Securities Division said Deutsche Bank failed to supervise its employees who knew of but failed to disclose, the conflicts of interest. In addition to the $17.5 million fine, DBSI was censured and agreed to cease and desist from conduct violating state securities laws.